IMDB scandal under Swiss federal prosecutor investigation

KUCHING, Aug 22 - Swiss federal prosecutors have opened criminal proceedings against two "entities" of the Malaysian state fund 1MDB and "unknown" third parties, the Office of the Attorney General (OAG) of Switzerland announced on Friday.

The news was broken by the Geneva newspaper Le Temps.

Lukas Straumann, author of " Money Logging" book and executive director of Bruno Manser Fund

It remains unclear who these "entities" exactly are but it is highly likely that one of them is a Geneva-based joint venture between 1MDB and the Saudi Oil group, PetroSaudi International.

Both joint venture partners have been accused of money laundering by Sarawak Report and various international media.

According to an e-mail communication by the OAG, Swiss prosecutors are investigating the 1MDB entities based on articles 305bis (money laundering), 314 (misconduct in public office) and 322septies (bribery of foreign public officials) of the Swiss criminal code.

The OAG said the criminal proceedings were based on two reports by MROS, the Money Laundering Reporting Office Switzerland. Since end of last year, the Bruno Manser Fund also filed two complaints under criminal law against 1 MDB, PetroSaudi International and various banks and persons involved in the Malaysian money-laundering operation.

The criminal proceedings are linked to a multi-billion-dollar corruption scandal surrounding the state fund 1 MDB, which is chaired by Malaysian Prime Minister Najib Razak.

The Bruno Manser Fund welcomes this important step in the fight against grand corruption and is hoping that Malaysian authorities will fully cooperate with the investigation and provide mutual legal assistance to Switzerland.

The Bruno Manser Fund calls on the Swiss authorities to extend the criminal proceedings against several banks involved in the 1MDB money-laundering operation, namely Coutts, JP Morgan, Falcon Private Bank and BSI.

The compliance offices of these banks have completely failed in their legal due diligence duties. The banks should thus be held responsible under articles 102 (corporate criminal liability) and 305bis (money laundering) of the Swiss criminal code.